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Deep Down (DPDW)

Participants
Ron Smith Chief Executive Officer
Charles Njuguna Chief Financial Officer
Marc Biancardi Private Investor
Call transcript
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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Deep Down’s Third Quarter 2018 Conference Call.

During the presentation, all participants will be in a listen-only-mode. After the speakers remarks you will be invited to participate in a question-and-answer session.

call recorded this X, Thursday, reminder, XXXX. a is today, being November As related forward-looking filed Deep in detail to A disclaimer Down’s release last SEC. the published statements night the and with press included is is request. available or the website Company’s It deepdowninc.com also upon on non-GAAP our used in of website. on release the press our measures included is call in financial release reconciliation press and A today’s and on to statements, the cautioned not place which date only are on forward-looking undue Listeners these of speak as made. reliance no revise after any undertakes forward-looking obligation to reflect circumstances its also or statements the Down Deep to of events made. date I’d to time, this call At Smith. like over Ron to CEO, the turn

Ron Smith

Good morning, of engagements forming and review third brief of globe. conference everyone Deep opportunities around then Down’s the discuss our call. recent growth operating our we few quarter I’ll third see start a a welcome and with quarter to performance,

quarter third XX% our yesterday, to ago. reported revenues a year rose As compared

contract anticipated been of pace has slower activity the we than project However, year. this and earlier

revenue deferred as below the longer-term near-term has projects operators the development believe Deep continues Down and stages our been for various engage and work. forcing of we funding we improve more through needed to the had in reality are offshore year, outlook maintenance performance of While is more earlier the advancing to and expectations in

us. within behind the industry now is oil we per period prices consensus contraction saw the third is general the quarter, barrel that During rise above and $XX of the

leads cautious equipment seeking opportunities we in to greenlighted. further effort and cautious being investment West streamline services rise sales ongoing the projects capital Given America, support specialized demand across Having posture Asia. moving Africa, are past expenses experiences, U.S., projects outside expanding offshore however, also and for marketing an our Latin expanding in to more delays invested making, slower and are decision give possible. in seeing and oil major to continues This which to or fashion acting to companies slower, while still a and

Down various Importantly, layer conducting and the and differences navigates political markets in a as business of country nature these provides social region. new each the Deep of complexity in

of certain expect sometime an in a and to in entities, be As we’re a fully it Africa local the Down’s projects international final these of political joint for these with XXXX. with that our be significant include proportion support a a to base that facilities. opportunity see requirements local partners in can response awarded while well entity expertise, a establishing This of effort country Despite West be and Down preferences operational the expanding added Deep requirements, work core the Deep leverage ownership country economic markets. amount capabilities venture And capabilities accomplished growing in as ability to labor and potential growing as new our in which must is in and mandates of example, stages operations. and to local of differentiation

XXXX regarding and ventures potential are optimistic secure significant West in the in potential growth We regarding business to offered beyond. our international the our efforts particularly in African region by cautiously

needs. meet asset mold markets knowhow in our approach to that our and internationally production and support products services exciting us DDI-in-a-Box, initiatives engineered For Both manufacturer to local continuing international manufacturing production locally, more to our our the our for are production enables that country well subsea umbilicals centralized solution that see of produce products, capabilities as are bringing locally, provides sensitive break to to and are markets company’s to and custom containerized portable collective provide we intensive, a in concepts as interest deploy strong is able to we efficient initiatives. for a to system other umbilical customers’ which efficient

and believe substantial globe to responses strong Down growth the We several for very Deep opportunities are getting they around over years. concepts offer the these customers next from

This of Down offshore in experienced exploration Deep growing for onshore. factors in production versus an appreciation is is for is now the control by security sided the positive some being as jurisdictions preference basins trend such as driven and in well emerging where being as Another energy is onshore production foreign key having bottlenecks enhanced a for by several offshore. there and the transportation that provided

we Charles? they other quarterly Additionally, well this difficult have current production, believe faster. need Down financial our into factors we to call production the property I’d the previously capitalize offshore cycle. basis, on aided of the handicap the back closing, offshore In offshore and offshore with turn products resources, positive And to management We over turning to and to so performance Deep on by demand Charles. in attention for the believe technology as indicators their These market very we some Deep opportunities positioned it’s while improvements Down’s are like services. that is operators are a can regaining oil and resources firmly future navigate to for abandoned get momentum. now to future

Charles Njuguna

for morning Good and call. Ron. thanks joining you, today’s Thank

and results plan last over our we quarters. the quarter progress year-to-date containment few third reflect cost Our in have made

the anticipated by While in collection declining we for to receivable approximately measures, significant on million with have $X.X $X now million XXXX. quarter to of quarter executed nearly operational largely accounts complete, improved balance lookout are identified Cash additional the as second we the on third compared are which most the efficiencies.

an to to continued our cash limit possible expenditures liquidity. where our effort also financial in strengthen We

of work believe more of service in rose margin with a in investments $X.X the Deep year. $X.X to the of XX% period by level pursue As quarter the Gross compared relative coming to opportunities the quarter. in this period. the XXXX expect XX% metrics operating than improved the two to we in in Down Down the of our the the aided end to XXXX. compared same margin at at key significantly third We to grew XXXX provides short-term XXXX, and third quarter second higher close to enough quarter capital Deep result, million the cash million third

we XXXX the SG&A to of revenue the of Additionally, in third third as reduce XXXX. quarter to able quarter a of XX% from were in percentage XX%

expense did the to the and SG&A increase fees to matters. primarily professional strategic quarter Our other in related legal third second review compared due quarter, the to slightly

of achieve normalize to into these in have but anticipate quarter expect head able second that were We to the in the quarter. fourth we some XXXX, should level we costs as SG&A well, expense the as around

effectively overhead right While our activity. and level cost current have of our to our anticipated sized business actions

cost that personnel that opportunities. We to continue ability take support absorb will reductions, will we new our customer ensuring action in to any key areas capabilities, while identify and and retained

of balance Importantly, that $X.X some a sound as while have in to I with of done reiterate financial XX, position we value book want almost and working remains million. capital tightening, Deep September $XX million almost of Down

between price Given to we with share and March on value XXXX. our current XXXX, program authorized stock our XX, the million solid commenced basis, share repurchase company’s position asset book a repurchases cash disconnects our combined pursuant $X on and current per October in

and While believe we share use cash excellent an of equivalents. repurchases are excess

that prepared program have we our opportunities weather some in unpredictable to and to And timing have the the well of in ensuring remarks sector. are order We our today. concludes the energy activity positioned while potential nature growth guided repurchase

Operator? turn investor will to call the I So operator back the to questions. take

Operator

a Investor. Private from Marc Biancardi, have We question from line a of the Instructions] [Operator

line open. Your is

Marc Biancardi

Hi Guys.

to Thanks. alternatives. at possibly just You process ongoing a stage. at had look starting mentioned complete strategic is wondering that or process I’m still if this

Ron Smith

Charles, would you handle that?

Charles Njuguna

Yes, for July. announced Good the process that We back has in I morning, begun. Marc. will. Thanks the question. Yes,

but who’ve to just house. call of the realize on you some is, would these if financial had been selling of going to high those similar a prepare some do of you level you’re you processes, For takes involved packages what It what’s some awhile, on a in information, we it.

to Just think you handle portfolio you you about let it you nice the put together, the take discussions. stage then the some pictures, rail

gone those our interested with parties and different bankers. who signing confidentiality investment are out packages some have are now having discussions agreements parties GulfStar Group, So and the to

material have announce yet. to We nothing

a because I in about this how it house live So point take neighborhood the in. we specify at will think it cannot again, like long

Our next sell. in two or days guy have get The to really out. but that seven ball one I’ve neighborhood house a door days, the the neighbor, we seven than sold sold took in three offer needed because months in low taken XX his to who across sold days, other he

of we If shareholders is continue to like good all very also desperate sense perfect only the Our that said before, good we but that is do to do to makes we for commitment are are. we’re it. as what shape operating nothing our in across, comes shareholders, will not we for

Marc Biancardi

All set.

Operator

back for to to at showing Instructions] time. his this remarks. questions closing no the I’m I turn [Operator Smith Ron conference would now like further

Ron Smith

we’re know, just all you. as click Thank you Well, a away.

call, you give send to have us want we’ll anything you you. about, a to us email, talk an happy be just If to to talk us

operator all you, And our and thank time. to call. We’ll who joined you with said, talk call. conclude let’s So to today’s that our of thanks next you

Operator

and Thank participation and have conference. your you a concludes for day. Ladies this gentlemen, today’s wonderful

You all may disconnect.